Published: 10/13/2017, 7:31:23 AM

The sugar company C.A Central La Pastora has been brought under the control of the Venezuelan government after its director was arrested for import fraud, according to Venezuela Analysis.

Venezuelan Attorney General Tarek William Saab told press Wednesday that company management allegedly defrauded the Venezuelan government of US$1.3 million by deliberately overestimating the price of importing sugar by 230%. He also confirmed that company director, Miguel Ángel González Zambrano, had been detained following a search by authorities.

"At this moment we are conducting a raid in Carora on the business C.A. Central La Pastora. We have solicited the seizure of its installations, so that it may be administered by the state," explained Saab.

In Venezuela, the supply of foreign currency is strictly controlled by the government, and companies wishing to buy dollars in order to import goods must make the purchases through the state's foreign commerce bureau CENCOEX and its sub-office for the Administration of Foreign Currency CADIVI. The institutions use a tiered exchange rate to calculate the price of the dollar to the Venezuelan Bolivar, while products deemed essential such as food and medicine are highly subsidized by the government.

Critics argue the intricate system has been exploited by businesses in recent years, with many companies inflating their importation costs in order to acquire cut-price dollars, or selling the state-dollars back to private buyers on the black market for huge profits. A number of shell companies falsely operating as importation businesses have also been discovered.

At the end of August the attorney general's office re-opened investigations into cases of foreign currency exchange and importer fraud.

Nine company directors have been arrested over the last week and dozens of arrest warrants issued, said Saab.

The latest detentions were made in Venezuela's international airports as the culprits tried to flee the country. Their alleged crimes include fraudulent acquisition the foreign currency, using false public documents, association to commit crime and money laundering.

"I want to highlight this, that all of what is being seized is being passed over to the state in order to be administered in a much more meticulous way... for the benefit of citizens," said the attorney general.

Saab also accused his predecessor Luisa Ortega of turning a blind eye to the massive corruption racket, despite being asked to investigate by President Nicolas Maduro.

"80% of those businesses being investigated by the former directorship had the case against them dismissed. In other words, absolute impunity, absolute leniency and absolute complicity," said Saab.

"Now things have changed under our management, and we have not rested for a second while exposing these crimes," he added.

The attorney general's office has also made a string of high profile arrests for corruption in the country's state oil company in recent weeks.

Ortega fled to Colombia in August after breaking with the administration of Nicolas Maduro in April. She accuses the government of political persecution against her and her family.